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Mr Johnson insisted he was still an “instinctive” supporter of ID cards and that the programme was even being speeded up by making the cards - for which the holder has to pay £30 - available to more parts of the country earlier than planned.

However, opponents said the announcement that they would no longer be compulsory signalled the scheme was in chaos and marked its “death knell”. Both the Tories and Liberal Democrats have said they will scrap the programme if they win power.

Civil liberty campaigners welcomed yesterday’s announcement. However, they warned that under the terms of the scheme, people’s personal details would still be stored on the National Identity Register at the point when they obtained or renewed a passport.

Mr Johnson said: “Holding an identity card should be a personal choice for British citizens - just as it is now to obtain a passport.

“Accordingly I want the introduction of identity cards for all British citizens to be voluntary.”

Asked if the cards would ever be made compulsory he said: “No.”

David Davis, the former shadow Home Secretary, said: “Alan Johnson has signalled the final stages of the descent into chaos of the governments ID card scheme.

“One of the fundamental design flaws in the system was that it had to be compulsory for it to work as advertised. Otherwise, how could any public servant, be they police, immigration officer, or welfare provider, demand to see it?

“Whilst it is welcome that Alan Johnson recognises that the British people will not be compelled to accept this intrusive gimmick, he should also understand that this marks the death knell of this ill-conceived scheme.”

David Blunkett, the then Home Secretary, first raised the notion of an ID cards programme in 2001. A draft bill was published three years later and became law in 2006.

The aim was to roll the cards out for Britons alongside the issuing of new biometric passports, which will contain data such as people’s fingerprints.

Once enough people had the cards - around 80 per cent - new laws were to be brought forward to make them compulsory for all.

In the meantime, a pilot scheme to force up to 20,000 airside workers at Manchester and London City airports to have them was planned for this autumn. That has now been abandoned.

However, ID cards will continue to be compulsory for foreign nationals wanting to stay in the country long term.

Chris Grayling, shadow Home Secretary said: “This decision is symbolic of a Government in chaos. They have spent millions on the scheme so far - the Home Secretary thinks it has been a waste and wants to scrap it, but the Prime Minister won’t let him. So we end up with an absurd fudge instead. This is no way to run the country.

“This is a partial retreat. It would be simpler if the government stopped floundering around and scrapped the scheme once and for all.”

The Government has long insisted having ID cards would help tackle terrorism, illegal immigration, identity fraud, crime and benefit fraud.

But Mr Johnson admitted the Government “should not have allowed the perception to go around that this was the panacea” for terrorism.

The pilot scheme for airside workers will now be voluntary, a decision widely welcomed by trade unions who had been strongly opposed to it.

Brendan Barber, TUC General Secretary, said: “Unions have had reservations about the pilot scheme from the very beginning, fearing that compulsory ID cards would add little to airport security, but could end up risking the jobs of individuals who refused to comply and deterring new recruits from applying for airport jobs in Manchester and London.”

A scheme allowing Britons to buy one of the £30 ID cards is already running in Greater Manchester but only 3,500 people have so far expressed interest.

A similar option will now be offered to residents in the whole of the North West of England from early next year, Mr Johnson said.

The Government is also looking at offering the cards for free for the over 75 year-olds.

The scheme is still expected to cost £4.9 billion over the next 10 years, although the lions share of that will be spent on the biometric passports. Up to £200 million has already been spent on the scheme.

Chris Huhne, the Liberal Democrat home affairs spokesman, said: “This is another nail in the coffin for the Government’s illiberal ID cards policy, which will soon be so voluntary that only Home Office mandarins seeking promotion will have them.

“These expensive and intrusive plans should be ditched now.”

But Isabella Sankey, director of policy for Liberty, said: “However you spin it, big ears, four legs and a long trunk still make an elephant. And this white elephant would be as costly to privacy and race equality as to our purses.”